Lifeway Foods® Announces Record Results for the First Quarter Ended March 31, 2024

Net sales of $44.6 million; up 17.8% year-over-year driven by volume growth of Lifeway Kefir

18th consecutive quarter of year-over-year growth

Delivers 410 basis points of gross profit margin expansion

Morton Grove, IL — May 14, 2024 — Lifeway Foods, Inc. (Nasdaq: LWAY) (“Lifeway” or “the Company”), a leading U.S. supplier of kefir and fermented probiotic products to support the microbiome, today reported financial results for the first quarter ended March 31, 2024.

“Following our tremendous results in 2023, I am thrilled to report yet another record-breaking quarter on the topline to kick off 2024,” commented Julie Smolyansky, President and Chief Executive Officer of Lifeway Foods. “Driven by volume growth in our flagship Lifeway drinkable kefir, we delivered our highest ever quarterly net sales of $44.6 million in the first quarter, up nearly 18% year-over-year, as our strategic sales and marketing investments continue to accelerate our sales velocities, grow awareness and win new consumers seeking better-for-you, premium products at a great value. This marked our 18th consecutive quarter of growth and 4th consecutive quarter reporting record net sales, which demonstrates the loyalty of our core customer base. Through our strong operational execution, accompanied by favorable transportation cost tailwinds, we also continued to improve on our key profitability metrics in the quarter, highlighted by our gross margin expansion and net income growth. We are pleased with this strong start to the year, and are consistently evaluating additional brand marketing and incremental distribution opportunities in an effort to build on this high bar of success throughout 2024.”

First Quarter 2024 Results

Net sales were $44.6 million for the first quarter ended March 31, 2024, an increase of $6.7 million or 17.8% from the same period in 2023. The net sales increase was primarily driven by higher volumes of our branded drinkable kefir.

Gross profit as a percentage of net sales increased to 25.8% for the first quarter ended March 31, 2024 from 21.7% during the same period in 2023. The 410-basis point increase versus the prior year was primarily due to the higher volumes of Lifeway branded products, and to a lesser extent a favorable impact of transportation costs.

Selling, general and administrative expenses as a percentage of net sales were 17.6% for the first quarter ended March 31, 2024 and 2023, respectively.

The Company reported net income of $2.4 million or $0.17 per basic and $0.16 per diluted common share for the first quarter ended March 31, 2024 compared to net income of $0.8 million or $0.06 per basic and diluted common share during the same period in 2023.

Conference Call and Webcast

A pre-recorded conference call and webcast with Julie Smolyansky discussing these results with additional comments and details is available through the “Investor Relations” section of the Company’s website at https://lifewaykefir.com/webinars-reports/  and will also be available for replay.

Forward-Looking Statements

This release (and oral statements made regarding the subjects of this release) contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other things, future operating and financial performance, product development, market position, business strategy and objectives. These statements use words, and variations of words, such as “continue,” “build,” “future,” “increase,” “drive,” “believe,” “look,” “ahead,” “confident,” “deliver,” “outlook,” “expect,” and “predict.” Other examples of forward-looking statements may include, but are not limited to, (i) statements of Company plans and objectives, including the introduction of new products, or estimates or predictions of actions by customers or suppliers, (ii) statements of future economic performance, and (III) statements of assumptions underlying other statements and statements about Lifeway or its business. You are cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events and thus are inherently subject to uncertainty. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from Lifeway’s expectations and projections. These risks, uncertainties, and other factors include: price competition; the decisions of customers or consumers; the actions of competitors; changes in the pricing of commodities; the effects of government regulation; possible delays in the introduction of new products; and customer acceptance of products and services. A further list and description of these risks, uncertainties, and other factors can be found in Lifeway’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and the Company’s subsequent filings with the SEC. Copies of these filings are available online at https://www.sec.gov, https://lifewaykefir.com/investor-relations/, or on request from Lifeway. Information in this release is as of the dates and time periods indicated herein, and Lifeway does not undertake to update any of the information contained in these materials, except as required by law. Accordingly, YOU SHOULD NOT RELY ON THE ACCURACY OF ANY OF THE STATEMENTS OR OTHER INFORMATION CONTAINED IN ANY ARCHIVED PRESS RELEASE.